20191127Reply Brief.pdf

Benjamin J. Ouo (ISB No. 8292)
Tl0N6thStreet
Boise, ID 83701
Ph: [phone] x 12
Fax: [phone]
[e-mail]
RECEIVED
i.1l9t{0Y 21 Plt 2:09
', rl i'ri r [:'Joudhrr8 s r oH
Attomey lbr the Idaho Conservation League
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE )
APPLICATION OF IDAHO POWER )
COMPANYTOSTUDYTHECOSTS, )
BENEFITS,ANDCOMPENSATION )OFNETEXCESSENERGY )
SUPPLIED BY CUSTOMERON. )
SITE GENERATION )
C]ASE NO. IPC-E-1It.I5
REPLY BRIEF OF THE IDAHO CONSERVATION LEAGUE
AND VOTE SOLAR ON TREATMENT OF E,XISTING CUSTOMERS
NOVEMBER 27,20I9
1 L Introduction
2 Idaho Conservation League ("ICL") and Vote Solar respectfully submit this Reply
3 regarding treatment ofexisting customers with on-site generation pursuant to Order No. 34460.
4 For the reasons set forth in their Opening Brief and further supported below, ICL and Vote Solar
5 request that if the Commission approves the new Net Hourly Billing Program established
6 through the Settlement Agreement for future customers with on-site generation, it allow existing
7 customers with on-site generation to remain on the curent Net Monthly Metering Program. In
8 light ofthe fact that such treatment does not result in any proven, unjust cost shifting or unfair
9 rates, it is a proper exercise ofthe Commission discretion and will ensure that "any service
10 rendered . . . shall bejust and reasonable" to respect customer's personal investments made in
1 I response to and in order to conform with all requirements of Idaho Power Company's ("ldaho
12 Power") net metering tariff. Idaho Code 61-301.
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U. Idaho Power Cannot Show That Respecting the Investments of Existing Onsite-
Generators Contributes to a Proven Cost-Shift
Allowing existing customers with on-site generation to remain on the net metering
program does not cause or exacerbate any proven, unreasonable "cost shift" to other customers.
Idaho Poller's Opening Brielmakes a series of unproven assertions about alleged "cost shifts"
by customers with on-site generation. Those arguments rehash allegations that ldaho Power has
repeatedly made, repeatedly failed to support \r'ith direct evidence, and which this Commission
has repeatedly refused to accept without such evidence. Specifically, Idaho Porrv'er claims that
"[s]ince net metering's inception in 1983, the standard rate paid has failed to properly recover the
costs incurred to serve customers with on-site generation." ldaho Power Br. a/,/. However,35
years after establishing net metering in Idaho, and more than a decade since asking Idaho Pow'er
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I to document its cost-shift claim, this Commission noted that as of 2018, the analysis to support
2 cost shilting arguments is "incomplete ." Order No 34046 at 18. That remains true today.
3 The history of this Commission's decisions regarding net metering is replete with
4 examples of the Commission requesting evidence supporting Idaho Power's cost-shift claims and
5 Idaho Power failing to provide it. In 2001 , Idaho Pou'er proposed the modern Schedule 84 Net
6 Monthly Metering Program while alleging potential cost-shifting to support a system-wide cap of
7 2.9 MW. Order No 28951. At that time, Idaho Power had three total net metering customers, so
I could not quantify any noticeable cost-shifting. The Commission acknowledged the Company's
9 cost-shift allegation, but did not find any actual cost shift. Instead, it declared that when the 2.9
10 MW cap was reached, the Commission "expect[ed] a report regarding the required level of
l1 subsidization by non-participants." Id
12 Idaho Power returned to the Commission in 2012 as it approached the 2.9 MW capacity
13 cap. While Idaho Power again alleged cosfshifting, the Commission rejected that argument,
14 raised the cap, and instructed that "more work needs to be done" and "if the Company $,ishes to
15 raise these issues again, then it should do so in the context ofa general rate case.-' Order No
16 32846at12-13.
17 For five years following Order 32846, Idaho Power filed reports alleging cost shifts but
18 those reports were not scrutinized by the Commission or the public. Those claims did not stand
19 up once subjected to scrutiny. Idaho Power filed a stand-alone docket in 2017, again citing the
20 boogeyman ofcost shifting and proposing program changes. Vote Solar identified several flaws
2l in the Company's basis for claiming cost shifts and demonstrated that the available evidence
22 suggests that customers with on-site generation have significant load reductions at the time of
23 system peak while still paying sizeable electricity bills, resulting in customers with on-site
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ICL and VS Reply Brief on Existing Customers
I generation paying more than their costs and possibly subsidizing other residential customers.r
2 The Commission's Order 34046 acknowledged that "the Company has found, and the parties
3 vigorously asserted, the cost to serve on-site generation customers may be lower than the cost to
4 serve their current class members. The benefits that on-site generation provide to the Company's
5 infrastructure and resource allocation, once quantified, may well prove to outpace any alleged
6 costs, increases in fixed-cost responsibility or decreases in net excess energy compensation
7 credit". Order No. 34046 at 18. The Commission then explained that "cost of service issues will
8 be fully vetted ifand when the Company applies to change the rates of customers that take and
9 provide service under Schedules 6 and 8." ld. at 16. And still, no fully-vetted cost of service
10 analysis has been conducted in this docket.
l l A "cost-shift" occurs when the costs to serve one customer are paid by another customer.
12 Identi$ing and quantifying a cost-shift, therefore, first requires a determination of the costs to
13 serve the customer, the revenues received from the customer, and the value ofother services
l4 provided by the customer to the utility. Additionally, because there is an inevitable range of
15 individual customer cost recovery, isolating a cost-shift from the range ofcost recovery inherent
l6 in any heterogeneous group ofcustomers requires identifoing the range ofcosts and revenues
17 across the utility utilizing a consistent methodology. Idaho Power has not undertaken any of that
l8 analysis on a system wide basis so cannot support a cost-shift claim.
19 Moreover, it is important to note that reduced revenues from a customer or group of
20 customers is not the same as a "cost shift." Revenues liom customers change with use. But that
21 corresponds with a "cost-shift" only if changes in cost to serve, relative to other customers, does
22 not also change. Thus, while customers who install generation reduce the revenues collected
rKobordirectin l7-13 at page 73. lines I l-16.
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1 from them, that decrease in revenue is not the same thing as a "cost shift" because their reduced
consumption ofgrid-supplied electricity also reduces costs to serve. That is true ofnot only
customers with on-site generation, but all customers who reduce their electricity consumption for
any other reason, such as buying more efficient appliances, changing their daily routines,
changes to the number of members ofthe household, and leaving for warmer environs during the
winter.
The bill impact of offering legacy access to the Net Monthly Metering Program for
Existing Customers is not a cost-shift and should not be interpreted as such. ICL and Vote
Solar's Opening Brief quantified the possible impact allowing this equitable treatment would
have on non-participating Idaho Power customers at $0.1 8 per month for a typical residential
customer, an amount that is only 0.2% of a typical residential customer's monthly bill. That
value is not a cosfshift and should not be conlused with a cost-shift. The $0. I 8 ligure is not
connected to a cost of sen'ice and does not reflect underpayment ofcosts by customers with on-
site generation under net metering. Instead, it simply reflects the difference in the magnitude of
compensation to Existing Customers for their exports under the Net Monthly Metering Program
and under the Net Hourly Billing Program.2 The calculation quantifies the total difference
between the customer bills under the two programs relative to total customer bills to compare the
minimal rate impact for non-participants to the burdensome bill increases that would be
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2 ICL and Vote Solar do not agree that the Export Credit Rate and underlying
methodology as described in the proposed Settlement Agreement provide a fair valuation of the
avoided costs associated with distributed energy exports. At most this value represents a number
that a portion ofparties could agree to in order to reach settlement and it should not be
interpreted by the Commission as establishing anything other than a compromise amenable to
signing parties.
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1 experienced by Existing Customers were they to be enrolled in the Net Hourly Billing Program
2 outlined in the Settlement Agreement.
3 Therefore, because ldaho Power has n"u., prou"n any cost-shift from existing solar-
4 owners on the Net Monthly Metering Program the Commission should refrain from making any
5 such finding in the present case and again make clear that such a finding can only be reached
6 after a full vetting ofcost ofservice issues in a general rate case.
III.Idaho Law Allows The Commission To Distinguish Behyeen Characteristics of
Customers As Well As To Make A Legislative Decision To Apply A Nen' Program
Prospectively.
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Idaho Power's Brief also contends that the Company "does not believe ldaho law'
supports developing separate rates for new and existing on-site generation customers under these
circumstances." 1da ho Power Br. at I -2. Specifically, Idaho Power contends that "[d]istinctions
between customers based solely on the date the individual became a utility customer have not
been upheld by the Idaho Supreme Court on appeal and subsequently have been disfavored by
the Commission. Idaho Power Br. at 2. That argument rests on an incorrect reading ofldaho
caselaw' for three reasons.
First, the ldaho Supreme Court cases that Idaho Power relies on involved rates paid by
customers for utility service provided by the utility. It is not clear that Idaho Code 6l -3 153 and
Idaho Supreme Court decisions interpreting it even apply to the separate issue ofcompensation
I ldaho Code 6l -3 I 5 provides:
No public utility shal[, as to rates, charges, service, facilities or in any other
respect, make or grant any preference or advantage to any corporation or person
or subject any corporation or person to any prejudice or disadvantage. No public
utility shalt establish or maintain any unreasonable difference as to rates, charges.
service, tacilities or in any other respect, either as between localities or as
between classes olsen'ice. The commission shall have the power to determine
any question offact arising under this section.
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I lo customers for electricity they provide to the utility. It is important to note in this case that the
2 "ru|e" at issue before the Commission is the Settlement Agreement's compensation to the
3 customer for exported electricity. There is no proposed change to the rates that customers pay for
4 the electricity receivedfrom the utility. Under the Settlement Agreement, those rates would be
5 the same for new and existing customers.
6 It does not appear that the Commission or supreme court apply Idaho Code 61-315 to
7 setting rates for compen sation Jbr services provided to the utility.lndeed, this Commission
8 regularly applies different rates for purchase from non-utility generators, including different
9 vintages oflgenerators, without ever mentioning Idaho Code 61-315 or related supreme court
l0 decisions. See e.g., Order No. 32697 at 21 (allowing existing generators to obtain immediate
11 capacity value upon contract renewal, even ifthe utility is not capacity deficient, while requiring
12 new generators to wait for a capacity deficiency year before receiving capacity value); Order
l3 32131 at 5-6,9; Order No. 32262 at2,8 (applying the "lRP Methodology" rather than published
14 avoided cost rates for new generators after December 14,2010). Applying Idaho Code 6l-315 to
l5 different compensation rates for new and existing customers for their generation under the
16 Settlement Agreement would call into question the Commission's prior and future
17 determinations of compensation to non-utility generators. There is no need to open that door in
1 8 this case. Idaho Code 6l -3 I 5 simply does not apply to compensation paid by a utility for
19 services provided to the utility.
20 Second, even ifldaho Code 61-315 does apply to rates for sales to the utility, the law
2l merely prohibits unreasonable differences between the customers. Idaho State Homebuilders v.
22 Wash. Iltater Power, 107 ldaho 4l 5, 420 (1 984) (" Homebuilders"). The cases Idaho Power cites
23 rejected dillerent rates for new and existing customers because the Commission failed to identify
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1 a difference between those groups relevant to the charges at issue. E.g., Homebuilders, 107 Idaho
2 at 421 (finding the prolfered basis to justifu charges for new electric heat customers lacking
3 where the pattem, nature and time ofuse leading to the need for new infrastructure was
4 indistinguishable from existing customers); Building Contrdctors Assoc. v- Idaho Pub. Util.
5 Comm'n,128 Idaho 534, 538 (1996) (different charge for new customers rejected where charge
6 was to allocate cost of new' infrastructure that *,as caused equally by new and existing
7 customers). Thus, the cases stand only for the proposition that the Commission cannotjustifu
8 different charges "based merely on whether those customers are old or new ." Idaho Power Br. aI
99.
l0 Nothing in Idaho law precludes diff'erent rates for new and existing customers that are
11 based on differences that allow for reasonable distinction, rather than "merely on" whether they
12 are old or new. Those differences can be cost, quantity, or conditions ofservice, the time, nature
l3 or pattem ofuse, the increase or depreciation in property value or service rendered, policies to
14 encourage conservation and optimum use and resource allocation, or other factors. FMC Corp. v.
15 ldaho Pub. Uril. Comm'n, 104 Idaho 265,277 (1983); Grindstone Butte Mutual Canol Co. v.
16 IPUC,l02ldaho 175, 180 (1981); UtahJdaho Sugar Co. v. Intermottntain Gas Co., 100 Idaho
17 368, 377 (1979); Appliccttion of Boise Water Corp.,82 Idaho 8l , 88-89 (1960) (citing Duranr v.
l8 City oJ Beverly Hills, 39 Cal.App.2d 133, 102 P2d,759,762). As the supreme court stated
19 clearly, "We do not find one criterion to be necessarily more essential than another. Nor do we
20 find the criteria as listed above as being exclusive." Grindstone Butte, l02ldaho at 1 80.
2l Third, the limitations in Idaho Code 6l-315 apply when the Commission is acting in is
22 quasi-judicial or regulatory role offact finding and equitably allocating costs betw'een customers,
23 not to the Commission's quasi-legislative decisions to change program structures going forward.
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I Building Contractor Association of Southwestern ldaho v. IPUC, 1 51 Idaho 10, I 5 (201 1). Those
2 prospective program changes-even if "substantially different" from prior policies-are subject
3 only to the requirement that the Commission explain the change and the decision not be arbitrary
4 and capricious. 1d. at 15. Thus, in Building Conlractor Associalron, the Commission could apply
5 a new line extension charge to neu'customers prospectively, even though different than the
6 charges previously applied to other customers for the same service of connecting to the utility's
7 system. Id. at l5-16.
8 The law, as applied to the facts in the record here, allows the Commission to apply the
9 new Net Hourly Billing Program to new customers, while allowing existing customers to remain
l0 on the current Net Monthly Metering Program.a
1l First, the Commission here is asked to rule on the compensation for electricity generation
12 the customer is providing to the utility, not rates for utility-provided service to which Idaho Code
13 6l-315 applies. Regardless of how the Commission treats existing and new customers with on-
14 site generation, all customers will be subject to the same rates and rules for consuming utility
15 services. Accordingly, Idaho Code 61-315 provides no barrier to distinguish between new and
16 existing customers in setting different programs for customer generated electricity provided to
17 the utility.
l8 Second, the Commission is asked to distinguish among customers in this case based on
19 the I'act that diffbrent generating systems will be designed for the Net Hourly Billing Program
20 than were designed for Net Monthly Metering Program. Idaho Power is wrong on the facts that
2l existing customers *'ith systems designed around traditional net metering and new customers
4 Administratively the Commission can accomplish this by requesting updated schedules
for 6(a), existing customers under the now-in-effect Schedule 6, and 6(b), new'customers u'ith
the negotiated export rates and undertaking a similar approach for Schedule 8.
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1 who will install systems designed around the different economic signals sent through net hourly
2 billing and smart inverters, "share key load and usage characteristics" including "increased
3 volatility in demand and load factors, excess net-energy exportation in the spring and summer,
4 and more volatility in contributions to the Company's peak(s)." Idaho Power Br. at I 1. As
5 shown by the Idaho Clean Energy Association Brief and Affidavit of Kevin King, there are
6 perlormance differences between existing customers who have a generating system designed
7 specifically to the Net Monthly Metering Program and customers who will design a generating
8 system to ma.ximize benefits under the very different economics of a Net Hourly Bilting
9 Program. Those differences in the nature, pattem, and type of use-not "merely because" a
l0 customer is old or new-justify different rate treatment.
l1 Third, the Commission is able to make a quasi-legislative change to the Net Hourly
12 Billing Program prospectively, to new customers, even though the Net Monthly Metering
13 Program applies to existing customers. In 2013, the Commission approved a settlement that
14 prohibited Idaho Power from actively seeking new participants in the demand response programs
15 while allowing them to continue to make incentive payments to existing customers. Order No
16 32923.Llke the present case, making a quasiJegislative change to a program prospectively,
17 while continuing to apply the previous program to then-participating customers, is not precluded
I 8 by Idaho law. Continuing to offer a program to then-participating customers while making a
l9 change as to future customers is a normal approach to balance the equities ofjust and reasonable
20 utility programs *'hile respecting individual investments to meet individual needs.
November 27. 2019
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tv.Idaho Porver's Argument That Customers with On-site Ceneration Are Public
Utilities Is Clcarly Wrong
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Idaho Power makes a strange and demonstrably wrong argument that existing residential
and small general service customers with on-site generation have "undertaken to serve the public
for private gain". Idaho PowerBr.at '12-17, quoting City of Pocatello v. Murray,2l Idaho 180,
199-200 (1912). The Commission should clearly and firmly reject this position that misapplies
Idaho law, mischaracterizes net metering, and is poor public policy. To hold that property is
dedicated to public use-- the test ofa public utility- is "not a trivial thing" and requires a finding
ofunequivocal intention. Stoeher V. Natalorium Co., 36, Idaho 287 (1922). Customer owned
distributed generation falI well short of that standard.
Customers with generation seek to fulfill their own energy needs, not the public's. When
the Commission approved the current Net Monthly Metering Program it specifically stated,
"While we acknowledge that [renewable generators can obtain firm and non-firm PURPA
contracts] u'e believe the primary thrust ofnet metering is to provide customers the opportunity
to offset their own load and energy requirements." Order No 2895l.For the entire 36-year
history ofnet metering. stakeholders have understood net metering to be intended to allow
customers to offset their oun needs. Idaho Power's unfounded, last-minute allegation that solar
owners are actually public utilities by dedicating their investrnent to public use is contrary to that
historical understanding ofnet metering as well as lacking the unequivocal dedication required
by Idaho law to become a public utility.
Further, unlike the water utility owner in the century-old case that ldaho Power cites,
existing customers with on-site generation do not claim to have a due process right to enforce a
prior contract rate liee of state interference. Pocatello,2l Idaho at 814. Moreover, no net
metering customer has made the unequivocal dedication ofproperty to public use requisite to
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I invoke the state's authority to regulate public utilities, which was the premise ofthe holding in
2 fie City of Pocatello case Idaho Pow-er relies on. 21 ldahoat819. To the extent onsite-
3 generators are doing anything beyond self-supplying their own electricity, they are simply
4 providing their excess generation to Idaho Power for ldaho Power to use as an input to its utility
5 operation. That does not make the customers with on-site generation a utility any more than the
6 hardware store selling Idaho Power bolts and floor wax becomes a utility. And, if it did,
7 customers with on-site generation would be entitled to a minimum return on their investment
8 from this Commission. See Pocatello,2l Idaho at 818 (noting that the utility was entitled to the
9 "reasonable maximum rate" as a public utility). Accepting Idaho Power's position that every
l0 customer with on-site generation is a public utility would require the Commission to directly
1l regulate more than 5,000 individuals today and more in the future. This outcome is counter to the
12 law, ignores the purpose ofnet metering as described by the Commission and, even iflegal,
l3 would be poor public policy.
l4 V. The Commission Should Require Effective Notice, Not Notice Generally
Idaho Power's Briefincludes arguments and attachments that purport to notifo customers
ofthe entire scope, timing, and impact ofpotential changes. Idaho Potver Br. at l2-l3.ICL and
Vote Solar acknowledge the Commission has stated that rates are not contracts and are subject to
change. But the key question is not whether that notice happened, but what was actually
conveyed and understood by that notice. That is, did the public have notice of a completely
different compensation structure when told that rates, generally, change?
For example: Telling customers that utility rates are subject to change is like telling
drivers that traffic lights change. Based on experience, drivers will interpret the waming to mean
that green will change to yellow, yellow to red, and red back again to green. Giving notice to the
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November 27,2019
I driver to be aware that the light will change will not prevent her from being rightly surprised if it
2 the light changes into an elephant. The public comments in the case indicate that notice of
3 generic changes to rates did not provide effective notice ofthe change to the fundamental nature
4 ofthe on-site generation program.
5 There is a critical dilference between changes in consumption rates and changes to an
6 entire program structure as the Proposed Settlement here does. There is no dispute that
7 customers are alr,are that consumption rates change over time. Idaho Potver Br. at 16. Under
8 traditional net metering, the tariffed rates fluctuate for customers with on-site generation as they
9 do for all other customers. Customers considered the possibility ofthose changes, as the
l0 Commission instructed in Docket IPC-E-06-17 andIPC-E-12-27. Idaho Power Br. at '14-15.
I I Regardless of whether the Commission imposes the Net Hourty Billing Program on existing
12 customers, or allows them to remain on Net Monthly Metering Program, they will continue to
l3 experience the same changes in the consumption rates that customers are familiar u'ith.
14 However, periodic changes to rates-a few pennies per kilowatt hour up or down from time to
l5 time or a few dollars per month difference in the fixed charge from time to time- is
16 fundamentally different from changing an entire program structure. It not reasonable to expect
17 existing customers who invested years ago to have foreseen the change lrom netting monthly to
18 measuring every hour, or having separate rates for imports and exports with exports valued by a
19 wholly new and unprecedented methodology, or mandating smart inverters, or offering a non-
20 export option. The entire Net Hourly Billing Program did not exist until the parties created it
21 through negotiations in this case. Expecting customers to be on notice that everything could
22 change, at any time, to structures they have never heard ofbeflore, is poor public policy because
23 it creates a level of uncertainty that will inhibit private investrnents.
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1 Whether or not existing customers received generic notice that rates change, the fact
2 remains that they made long term investments based on the structure olthe program that existed
3 at the time. As detailed above, Idaho law empowers the Commission in this docket to reasonably
4 distinguish between existing and new customers with on-site generation because the design of
5 the two programs will result in a fundamentally different nature of use. To ensure fair, just, and
6 reasonable utility services, the Commission should not let notice in form only prevent allou'ing
7 existing customers with on-site generation time to recoup their investments before significant
8 structural changes are made to the program.
9 VI. There is No Need To Further Adjust Rates For Customer with On-Site Generation
l0 ln Order No 34460 the Commission established a clear and separate briefing schedule to
I I address the Settlement and the separate question ofhow to treat existing customers. Yet, Idaho
12 Power's briefraises an unrelated argument that undercuts the finality and reasonableness ofthe
l3 Settlement. While not related to the treatment of existing customers, Idaho Power's assertion
14 here, if left unanswered, could cause further controversy as stakeholders seek to instead tum the
l5 page after a long effort toward collaboration and compromise.
l6 Idaho Power's Opening Briefraises the possibility that it will seek to undo the finality
17 and balance struck by the Settlement Agreement by coming back to the Commission and seeking
18 to alter rates for the consumption ofcustomers with on-site generation. Idaho Po,"-er Br, p.l.
l9 Specifically, Idaho Power states that the "Settlement Agreement filed in this case constitutes a
20 significant step in establishing a proper compensation structure lor Schedule 6, Residential
21 Service On-Site Generation ("Schedule 6"). and Schedule 8, Small General Service On-Site
22 Generation ("Schedule 8"), customers until the Company and stakeholders can address rate
23 design in a subsequent proceeding." Id.
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I The Commission should not countenance such counter-productive sabre rattling by Idaho
2 Power before the ink is even dry on this Settlement. As the Commission stated when rejecting
3 Idaho Power's attempts to change consumption rates lor net metering in 20l2 "ifthe Company
4 wishes to raise these issues again, then it should do so in the context ofa general rate case."
5 Order No 32846 at 12 .1J. And again in 2018: "cost of service issues will be fully vetted if and
6 '*'hen the Company applies to change the rates of customers that take and provide service under
7 Schedules 6 and 8." Order No 34046 al 16. To encourage effective collaboration among
8 stakeholders going forward, ICL and Vote Solar recommend the Commission reiterate what they
t have said many times: any effort to adjust rates for consumption requires a cost of service study
10 that covers all utility costs and customer classes and is conducted in the context ofa general rate
1t case.
12 VIl. The Commission Should Allow Existing Customers Twenty Years Beforc13 Transitioning To Net Hourly Billing.
14 As ICL and Vote Solar noted in their Opening Brief, customers should be allowed some
15 stability in the program that dictated thcir investment based on the expected lif'e ofthe
l6 equipment. ICL-VS Br. at 9. That is a minimum of twenty years for small solar equipment,
17 which is consistent with the period provided by other states. ICL-VS Br. at 6-7. Staff and Idaho
l8 Power suggest shorter periods. Idaho Power suggests that, ifthe Commission allows existing
19 customers to continue to receive credit for exported generation under a traditional net metering
20 program, it impose an "end date" for that treatment often ycars. Idaho Power Br. at22. Staff
21 proposes to end the legacy program treatment lbr existing customers after eight years. Staff Br. al
22 9.
23 ICL and Vote Solar commend Staff and Idaho Power for recognizing a need to provide a
24 period for customers to realize the benefit oftheir investments in generation before transitioning
l5IPC-E-18-15 November 27, 2019
ICL and VS Reply Brief on Existing Customers
I to a new rate structure. However, the eight and ten year periods suggested are not supported by
2 the evidence and still impose a significant cost to existing customers with on-site generation
3 while providing no perceptible benefit to olher customers.
4 Staff suggests that eight years is reasonable as it "allows Existing Customers to budget
5 and prepare for the significant changes to their utility bills;' Staff Br. at 9. Staff attempts to
6 contrast their proposal for an eight-year grace period with the transition period for neu'
7 customers outlined in the Settlement Agreement on the grounds that the latter would represent "a
8 distinctly different value proposilion than what they planned for." Stalf Br. a1 9. Staffis correct
9 that the Settlement Agreement contains a vastly different proposition than what existing
l0 customers planned for when they made significant personal investments in generation. However,
1l Staffdoes not provide any evidence to support its position that customers can adapt in any
12 reasonable way by year eight, or that the impact on customer investments diminishes at year
13 eight. In fact, the simple payback analysis conducted by ICL and Vote Solar reveals that an
14 eight-year grace period *'ould still represent a distinctly different value proposition than w'hat
I 5 customers planned for, w'hich is the exact outcome Staff seeks to avoid with their proposal.
16 Stalls eight-year grace period proposal would result in almost 400 existing customer
17 investments being rendered uneconomic, rather than the 1,300 customers rvho would experience
l8 this problem if they were forced onto the transition period as outlined in the Settlement
l9 Agreement. In addition, under Stafl s proposal existing customers with on-site generation would
20 still see an average bill increase of 25% after the eight-year grace period while over 1,300
2l families and small businesses *,ould see their monthly bills increase over 1000/o. Over the 20-
22 year typical life ofgenerating equipment, that translates into thousands ofdollars in higher utility
23 bills than originally anticipated. Whether or not Idaho families and small businesses could
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ICL and VS Reply Brief on Existing Customers
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ICL and VS Reply Brief on Existing Customers
November 27, 2019
1 "budget and prepare" for such a result, as Staffindicates, the fact is that they still have to endure
2 it. And for no good reason. Existing customers responded to program parameters put in place
3 by this Commission to undertake large investments in local clean energy. As established in ICL
4 and Vote Solar's Opening Brief, undercutting those customers' investments comes r,l'ith no
5 appreciable benefit on the other side. The impact to non-participating customers associated with
6 protection of existing customers is so small that it cannot outweigh the impact on existing
7 customers. For its part, Idaho Power requests that, if the Commission ofl'ers legacy access to the
8 Net Monthly Metering Program that it implement an end date for the program. Iduho Power Br.
9 at22.ldaho Power states that "it may become administratively burdensome for the Company to
10 continue to track and manage a set ofuniquely situated customers" and suggests a ten-year
I I legacy period.ldaho Pouter Br. at 22. While there may be some level of administrative cost to
12 provide legacy access to the Net Monthly Metering Program, there is no evidence of meaningful
l3 expense afler the initial billing system is setup or that the length ofthe legacy period impacts the
14 expense. That is, there is no evidence that a ten-ye& legacy period costs demonstrably less than
l5 any other period. If an end date is necessary, ICL and Vote Solar urge the Commission to use
16 twent) years as a reasonable alternative that allows customers to see the benefits oftheir
1'l investments while allowing for an end date as Idaho Power requests.
l8 VIII. Defining Existing Customers Based on Any Date Before the Commission's Order in19 This Case Is Unreasonable, Unfair, and Unjust.
20 Staff and Idaho Po*'er both propose that qualification to remain in the Net Monthly
2l Metering Program be linked to dates which families and small businesses would have no way of
22 anticipating or reasonably understanding. Most troublingly, Staffproposes to define existing
23 customers as those that submitted applications before October 11,2019, prior to any public
24 Notice olthe Settlement Agre ement. Staff Br. at 2. Staff statcs: "This date is reasonable because
17
I it is the first date that the public was notified ofthe proposed program structure in the Settlement
2 Agreement." Staff Br. at 10. This statement is factually incorrect. White the October 11,2019
3 decision memo says the parties filed a signed settlement, negotiated under strict confidentiality,
4 the Commission did not issue a formal notice until October 17,2019. StaIF s proposed date
5 would bind the public based on knowledge they did not possess.
6 However, even applying the October 17,2019, date ofthe Notice of Settlement, as Idaho
7 Power proposes, would be problematic for practical reasons. Idaho Power at 22. Using that date
8 implicitly assumes that customers monitor the Commission's websile daily for notice of
9 fundamental program changes, and are able to read, digest, and understand the implications of
l0 the Settlement Agreement on that date. That is simply not realistic. Idaho utilities routinely ask
l1 for effective dates for other types ofchanges to give the utilities sufficient time to interpret the
12 ruling and prepare to implement the decision. Customers should be given the same basic respect.
l3 Further, an effective date that precedes the Commission determination on the Settlement
14 communicates to the public that the Commission's decision-making is pro lorma and that the
l5 public shoutd presuppose approval and act upon mere filings wirh the Commission, rather than
16 the results of the Commission's official actions. Absent system reliability emergencies ora
17 significant, unavoidable negative cost impact to customers, the Commission should reject, as a
l8 matter of overall policy, any attempt to impose effective dates that precede the Commission's
l9 decision.
20 As stated in ICL and Vote Solar's Opening Brief, the Commission should allow
21 customers adopting distributed generation to know the basic terms of the program to which they
22 would be enrolled when they submit their application. While Staff and Idaho Power allege some
23 kind of "run-on-the-bank" scenario, they provide no evidence this will actually occur. Moreover,
t8
IPC-B-18-15
ICI- and VS Reply Brief on Fxisting Custorners
November 27 ,2019
I any concems regarding negative impacts due to an uptick in applications during the 60-day
2 period are contradicted by the evidence, which clearly shows nominal impacts to other customers
3 by respecting the personal investments made by existing customers with on-site generation to
4 offset their own energy burdens.s
5 The Commission should recognize that these designs and decisions take time and set a
6 Program Enrollment Deadline 60 days following the Commission's order in this case. All
7 applications postmarked prior to that date should be considered eligible for the existing Net
8 Monthly Metering Program.
9 IX. Recommendations
The evidence in the record, Idaho law, and the public policy at issue in this case supports
an order allowing Existing Customers, who apply for interconnection within 60 days of the order
date, to remain on Net Monthly Metering for a period of at least 20 years.
Respectfully submitted this 27fi day of November 2019,
Ben amln J Otto
ldaho Conservation League
Local Cor,rnci[ - Vote Solar
5 ICL and Vote Solar's calculations of customer impact at 0.2yo of the typical customer's
monthly bill would roughly scale with additional enrollment. For example, if Net Monthly
Metering Program enrollment were to double in the 60 days following the decision (an outcome
that we do not believe is reasonable w'ithin any stretch of the imagination) that impact would
remain extremely small at 0.4%.
t9IPC-E-18-15 November 27.2019
ICL and VS Reply Brief on Existing Customers
l0
11
t2
,4^-*-
CERTIFICATE OF SERVICE
I hereby certify that on this 27th day ofNovember 20191delivered true and correct
copies of the fbregoing REPLY BRIEF ON EXISTING CUSTOMERS to the following via the
method ol service noted
enjamin J. Otto
Hand Delivery Mail:
Diane Hanian
Commission Secretary (Original and seven copies provided)
ldaho Public Utilities Commission
427 W. Washington St.
Boise, ID 83702-5983
Electronic Mail Onlv:
IPUC
Ed Jewell
Deputy Attomey General
Idaho Public Utilities Commission
Edward j [e-mail]. gov
Idaho Power
Lisa D. Nordstrom
Timothy E. Tatum
Connie Aschenbrenner
[e-mail]
[e-mail]
[e-mail]
[e-mail]
Idaho lrrigation Pumpers Associalion
Eric L. Olsen
Echo Hawk & Olsen PLLC
[e-mail]
Anthony Yankle
[e-mail]
IDAHYDRO
C. Tom Arkoosh
Arkoosh Law Offices
[e-mail]
[e-mail]
IPC-E-18-15
ICL and Vote Solar
Certificate of Service
Roclcy Mountain Power
Yvonne R. Hogle
Ted Weston
[e-mail]
Ted.weston@pacifi corp.com
Vote Solar
Briana Kobor, Vote Solar
[e-mail]
David Bender, Earthj ustice
[e-mail]
Al Luna. Earthjustice
aluna@earthj ustice.org
Nick Thorpe, Earthj ustice
nthorpe@earthj ustice.org
City of Boise
Abigail R. Germaine
Deputy City Attomey
Boise City's Attorney's Offrce
[e-mail]
Idaho Sierra Club
Kelsey Jae Nunez
Kelsey Jae Nunez LLC
[e-mail]
November 27,2019
Zack Waterman, Sierra Club
Mike Heckler. Sicna Club
[e-mail]
Micheal.p.heckler(@gmail.com
Idaho Clean Energt Associaiton
Preston N. Carter
Civens Pursley I-LP
[e-mail]
Industrial Customers o/ ldaho Power
Peter J. Richardson
Richardson Adams, PLLC
[e-mail]
Dr. Don Reading
[e-mail]
Micron Technolog,,, Inc.
Austin Rueschhoff
Thorvald A. Nelson
Holtand & Hart, LLP
[e-mail]
tnelson@hol landhart.com
ac lee@hol landhart.com
gi [e-mail]
Jim Srvier, Micron
j [e-mail]
Individual
Russell Schiermeier
[e-mail]
IPC-E- l8- 15
ICL and Vote Solar
Certificate ol Service Novcmbc-r 27. 20 I 9